The Medicare Wage Index (WI) is one of the factors that adjust a hospital’s overall payment from the Medicare program. Through the wage index, Medicare is able to maintain a consistent payment structure across IPPS hospitals while recognizing that the cost of labor varies in markets across the nation.
What is the Medicare Wage Index (WI)?
The Medicare Wage Index (WI) is one of the factors that adjust a hospital’s overall payment from the Medicare program. Through the wage index, Medicare is able to maintain a consistent payment structure across IPPS hospitals while recognizing that the cost of labor varies in markets across the nation.
How does the wage index affect Medicare payments?
Through the wage index, Medicare is able to maintain a consistent payment structure across IPPS hospitals while recognizing that the cost of labor varies in markets across the nation. Aspects of the wage index including how labor markets are defined
How is the wage index calculated in CMS?
In computing the wage index, CMS derives an average hourly wage for each labor market area (total wage costs divided by total hours for all hospitals in the geographic area) and a national average hourly wage (total wage costs divided by total hours for all hospitals in the nation).
Where does the data for the wage index come from?
Data included in the wage index derive from the Medicare Cost Report, the Hospital Wage Index Occupational Mix Survey, hospitals' payroll records, contracts, and other wage-related documentation.
What means wage index?
A labor market area's wage index value is the ratio of the area's average hourly wage to the national average hourly wage. The wage index adjustment factor is applied only to the labor portion of the standardized amounts.
What is the correct formula for wage index adjustment?
Rev Cycle FinalQuestionAnswerWhich is the correct formula for wage index adjusting a payment?(payment rate*labor portion *WI) + (payment rate*nonlabor portion) (payment rate * WI)184 more rows
What is Cbsa for Medicare?
Core-based statistical area (CBSA): A geographic area (defined by the Office of Management and Budget) that the Centers for Medicare and Medicaid Services uses to define the payment areas for the hospital wage index. CBSA is a collective term for metropolitan statistical areas and micropolitan statistical areas.
What is a Lugar County?
A Lugar designation allows a rural hospital to be considered urban if it meets certain criteria. The MDH program compensates small rural hospitals that are heavily dependent on Medicare patients with increased payments.
What is the average wage index for 2020?
55,628.60The national average wage index for 2020 is 55,628.60. The index is 2.83 percent higher than the index for 2019. When we compute a person's retirement benefit, we use the national average wage indexing series to index that person's earnings.
How does the average wage index affect Social Security?
Average monthly Social Security benefits generally increase because of wage-indexing and price- indexing. The Social Security benefit formula indexes a worker's earnings to overall economy- wide earnings.
What is Cbsa zip code?
The CBSA is a 5-digit numeric code which identifies the Metropolitan Statistical Area or Micropolitan Statistical Area in which the ZIP code lies. For larger metro areas, this database also includes the Metropolitan Division (if any) in which the ZIP code lies.
How are Cbsas defined?
A core-based statistical area (CBSA) is a U.S. geographic area defined by the Office of Management and Budget (OMB) that consists of one or more counties (or equivalents) anchored by an urban center of at least 10,000 people plus adjacent counties that are socioeconomically tied to the urban center by commuting.
What is the imputed rural floor?
The imputed rural floor allows New Jersey's hospitals to effectively compete for the highest quality health care talent available by providing parity with neighboring states.
What is wage index?
Wage index overview. Section 1886 (d) (3) (E) of the Social Security Act (the Act) requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts "for area differences in hospital wage levels by a factor (established by the Secretary) reflecting ...
How does CMS calculate the wage index?
In computing the wage index, CMS derives an average hourly wage for each labor market area (total wage costs divided by total hours for all hospitals in the geographic area) and a national average hourly wage (total wage costs divided by total hours for all hospitals in the nation).
When is wage index period?
Wage index periods follow the federal fiscal period of October 1- September 30. If a hospital has more than one cost report beginning during the wage index period (for example, a hospital has two short period cost reports beginning on or after October 1, through September 30 of a given year), a desk review is required on only one ...
What is CMS area?
CMS currently defines hospital geographic areas (labor market areas) based on the definitions of Core-Based Statistical Areas (CBSAs) established by the Office of Management and Budget (OMB) and announced in December 2003.
How often do Medicare administrative contractors audit hospitals?
At least every three or four years, the Medicare Administrative Contractors (MACs) will provide a detailed wage index audit to every hospital. For the past several years, MACs have focused more intensely on contract labor and physician costs than they did in previous years.
Is Medicare wage index reporting complicated?
Medicare wage index reporting can be complicated , especially as hospitals are fac ing additional challenges due to the COVID-19 pandemic. Hospitals could benefit from working with third-party specialists in this area to help make sure they are tracking and reporting information accurately.
Do hospitals have to file annual Medicare cost report?
All acute care inpatient prospective payment system hospitals are required to file an annual Medicare cost report to accurately submit their hospital wage index data in compliance with Centers for Medicare & Medicaid Services (CMS) regulations. Hospitals are advised to stay on top of their salary data and overall compensation strategies, ...
